Delivering really bad news

I think we all know that when there is bad news brewing, like say a shipment will slip by a week, you should let your customer know ASAP. That’s a no-brainer and not worth talking about.

But in today’s economy it is worth talking about how and when to deliver REALLY bad news. For example, I’m dealing with a company that just filed for Chapter 11 bankruptcy protection and we had to come up with a plan to inform the customers so they didn’t read about it in the paper.

The people at the level I was dealing with didn’t know for sure exactly what day we were filing, we just knew it was coming – and you can’t say anything to customers before the filing, who knows, it might not actually happen, so we knew we had to at least wait until the filing actually happened.

The VP of sales for this organization (~$400M) wanted a form letter to go out to all customers, period. I argued that the top 20% customers deserve at least a phone call, and the top 5% should get a face-to-face delivery.

We ended up doing a mixture, I got my 20% phone calls and we visited the top 2% and things went pretty well. Literally every customer took our calls and thanked us for explaining what this filing meant to our company and to our ability to service them short and long-term. We set up a Web site to post updates on so that everyone knew our status and things seem to running fairly smooth right now – we’ll see.

Bottom line is that communication is the key, if your customer hears about your dirty laundry from anyone other than you – you lost.